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After falling for two consecutive weeks, the Nickel futures contract on the Multi Commodity Exchange (MCX) got a breather in the past week.
The contract has managed to bounce higher after making a low of ₹692.8 per kg last Thursday. The contract has risen about 4 per cent from this low, and is currently trading at ₹720 per kg.
Resistances are at ₹723 and ₹730, which are likely to be tested. If the contract manages to breach ₹730, the current upmove can extend to ₹740 or ₹742.
A further break above ₹742 looks less likely at the moment.
The bias is bearish on the charts as the downtrend that has been in place since November remains intact. This leaves the possibility less of the contract breaking above ₹730 in the coming days. A subsequent downward reversal after testing ₹730 in the near-term can trigger a fresh leg of downmove in the contract. In such a scenario, a fall breaking below ₹700 to ₹670 or ₹665 is possible.
High-risk appetite traders can go short at current levels and at ₹728. Stop-loss can be placed at ₹742 for the target of ₹680.
Revise the stop-loss lower to ₹710 as soon as the contract moves down to ₹695.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading
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